Is it possible to generate a mesh from a armature
Well that armature had some funny bone directions on that legs (the bones must look pointy from the abdomen like the left ones) 

The tool you are searching is a Modifier called "Skin". Like modifier, can't be used over an armature. Create a cube and modify their vertex or generate new and see how it works. You can also create one armature from your vertex with the option on the modifier (activated in object mode)

More info on:
http://wiki.blender.org/index.php/Doc:2.6/Manual/Modifiers/Generate/Skin